Wireless Companies: Dabbling in Direct Mail

Posted by: Olga Kharif on April 11, 2006

I have long been used to getting junk mail, shouting that I am pre-approved for credit cards and loans. But for wireless service?

A few days ago, I got a letter from Cingular telling me that I am pre-approved for its wireless service. I’ve asked around, and, just based on a survey of my friends, it seems that people are getting a lot more junk mail from wireless companies nowadays.

Apparently, Cingular, for one, looks through people’s credit reports and sends out these types of letters to people with good credit. If I sign up, the letter said, Cingular would offer me a choice of two free phones. One of them, Sony Ericsson Z520a, comes with a 4x zoom camera and a color screen. That’s a pretty good phone that Cingular is willing to subsidize for me.

The fact that we are starting to receive more direct mail from wireless companies obviously indicates that not all is rosy in the wireless land. It’s increasingly difficult to attract new subscribers in the face of competition from a growing number of Mobile Virtual Network Operators like Virgin Mobile. A hedge fund portfolio manager I have talked to for years recently told me he is worried that the industry’s per-subscriber revenues might begin to plummet as competition revs up and marketing costs skyrocket. That — even though data revenues are increasing. Could be.

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.